Midweek Precious Metals Market News (24 July 2024) | Precious Metals Gain On Weakened USD Ahead of GDP, PCE Data Reports

 

Midweek Precious Metals Market News Update (24 July 2024) Gold Up As Traders Price-In PCE, GDP Data Bets

After a rocky start to the week, gold (+$17.68) is up again today, 24 July as USD slips and investors price-in interest rate cuts likely to occur in two months. Two key economic reports are slated for release in the next two days, including the monthly United States GDP report and the Personal Consumption Expenditures (PCE) for the month of June. Both reports will play into the Federal Open Market Committee’s (FOMC) July 30-31 discussion as it considers whether or not to cut the federal interest rate. 

On Monday, gold logged marginal losses after President Joe Biden’s decision to exit the 2024 presidential race injected fresh uncertainty into U.S. markets. Midway through the trading week, gold recovered its Monday losses, making headway toward the recent all-time high of $2,482.97 per troy ounce. 

What’s behind today’s gold price run? The United States Dollar (USD) slipped this morning, boosting demand for gold as a hedge against the reserve currency. Interest rates have also played a vital role in moving metal prices this year. Earlier this year, the Federal Reserve hinted that three rate cuts may be coming in 2024. In the past few months, speculation concerning if – and when – these rate cuts will happen has driven gold past multiple fresh all-time highs. 

The FOMC has reiterated their intention to cut rates once the data shows that the economy is moving sustainably toward its 2% inflation target. Good news from Friday’s PCE could be the final piece of evidence the Federal Reserve needs to make good on its rate cut promises. Expect the gold market to react immediately, with demand for metal to spike if the Bureau of Economic Analysis (BEA) brings investors good news on the inflation front. 

Silver, Platinum Log Gains on Bullish Metals Market 

Silver (+$.13) also trended in the green this morning (24 July), gaining traction above the $29 level threatened as the metal slipped on Monday. Now sitting comfortably above $29, silver bulls are expected to push in an attempt to stabilize the precious metal beyond $30. Establishing that $30 support has been a struggle for silver investors all month, but solid PCE data could allow silver to ride gold’s tailwinds past the $30 line. 

Despite a hefty back-and-forth along the $30 line this month, silver is up over 23% and has outpaced gold on the year.

The gold-silver ratio is up this morning, climbing .36:1 and settling at 82.6:1. This year, a GSR of 90:1 or more seems to be the trigger for a gold sell-off; the ratio has spent only a handful of days above the 90:1 level. The ratio has climbed consistently since 11 July, and another major movement may be enough to justify a sell-off from gold stackers as they pivot to an undervalued silver market. 

Rounding off a day of precious metal gains, platinum (+$19.75) is similarly thriving amid geopolitical uncertainty and boosted odds of a September rate cut from the Federal Reserve. Platinum group metals have struggled with stability this year, with $1,000 proving a difficult support to establish and maintain as consumer hunger for electric vehicles continues to wreak havoc on industrial demand for PGMs. 

Here’s What to Expect From Precious Metal News This Week 

Expect major movements in gold, silver, and platinum markets over the next two days. A whirlwind of economic data releases will give traders a better idea of what to expect from the Federal Reserve. Tomorrow, the United States GDP report will offer a look into the general strength of the U.S. economy. The CPE report, due on Friday the 26th, should be even more impactful as traders look for signals regarding interest rate cuts. 

News that inflation is slowing faster than expected could make multiple rate cuts a distinct possibility for Q4 of 2024. Unfavorable inflation data from the June PCE will likely have a chilling effect on gold prices as investors adjust their bets on early rate cuts from the Fed.